Pages: (1-12 )
Abstract
This study used quarterly data from the Central Bank of Nigeria from 2007 to 2017 to examine the effect of foreign capital inflows on Nigeria’s aggregate economic performance measured by the gross domestic product (GDP). Tests of time series properties established a combination of level and first difference stationary variables with cointegration. The autoregressive distributed lag regressions for the long-run form showed that capital inflows into services related sub-sectors of telecommunication, banking, and shares produced a significant expansionary effect on the GDP as opposed to negative significant effect returned by the two industrial related sub-sectors. Thus, the money and capital markets sub-sector was a major influence on aggregate economic performance. We recommended the overhaul of critical elements of the manufacturing environment including infrastructure, credit conditions, and foreign exchange sourcing to enhance investment productivity in the sector and contribution to GDP. The diagnostics supported stability of the model.
Keywords: Capital inflows, portfolio, GDP, FDI, ARDL model, Nigeria,